2. This Master Circular consolidates the existing instructions on the subject of “Remittance facilities for Non-Resident Indians / Persons of Indian Origin / Foreign Nationals” at one place. The list of underlying circulars/ notifications consolidated in this Master Circular is furnished in the Appendix.

3. This Master Circular is being updated from time to time as and when fresh instructions are issued. The date up to which the Master Circular has been updated is suitably indicated.

4. This Master Circular may be referred to for general guidance. The Authorised Dealer Category – I banks and Authorized banks may refer to respective circulars / notifications for detailed information, if so needed.

The Regulations for transfer of assets outside India by a person, whether resident in India or not, are given in the Notification No. FEMA 13/2000-RB dated May 3, 2000, as amended from time to time. Accordingly, remittance of funds from the sale of capital assets in India held by a person, whether resident in or outside India, requires approval of the Reserve Bank except to the extent provided in the Foreign Exchange Management Act, 1999 (FEMA) or Rules or Regulations made there under.

2. Definition of NRI/ PIO

In terms of Regulation 2 of FEMA Notification No.13 dated May 3, 2000, Non-Resident Indian (NRI) means a person resident outside India who is a citizen of India. Person of Indian Origin (PIO) means a citizen of any country other than Bangladesh or Pakistan who had (a) at any time held Indian passport or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 or (c) the person is a spouse of an Indian citizen or a person referred to in (a) or (b).

3. Remittance of current income

3.1 Remittance outside India of current income like rent, dividend, pension, interest, etc., in India, of the account holder is a permissible debit to the NRO account. Authorised Dealer banks may also allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs who do not maintain an NRO account in India, subject to payment of applicable taxes as prescribed by Central Board of Direct Taxes.

3.2 NRIs/ PIO have the option to credit the current income to their Non Resident (External) Rupee account, provided the Authorized Dealer bank is satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted / provided for.

3.3 Foreign nationals who come to India on employment and become residents in terms of section 2 (v) of FEMA, 1999, and are eligible to open/ hold a resident savings bank account, are permitted to re-designate their resident account maintained in India as NRO account on leaving the country after their employment to enable them to receive their legitimate dues subject to certain conditions.

4. Remittance of assets by a foreign national of non-Indian origin

4.1 A foreign national of non-Indian origin who has retired from an employment in India or who has inherited assets from a person referred to in section 6(5) of the Act or who is a widow of an Indian citizen who was resident in India, may remit an amount not exceeding USD one million, per financial year (April-March), subject to the satisfaction of the Authorised Dealer bank, on production of documentary evidence in support of acquisition/ inheritance of assets and payment of applicable taxes in India, if any.

4.2 These remittance facilities are not available to citizens of Nepal and Bhutan.

4.3 When a person resident in India leaves India for a country (other than Nepal or Bhutan) for employment/business/vocation outside India or with an intention to stay outside India, AD Category-I banks may permit such foreign nationals to re-designate their resident account maintained in India as NRO account on leaving the country after their employment to enable them to receive their pending bona fide dues, subject to the following conditions:

AD Category-I bank should obtain the full details from the account holder about his legitimate dues expected to be received into his account.

AD Category-I bank has to satisfy itself as regards the credit of amounts which have to be bona fide dues of the account holder when she / he was a resident in India.

The funds credited to the NRO account should be repatriated abroad immediately, upon subject to the AD Category-I bank satisfying itself regarding the payment of the applicable Income tax and other taxes in India.

The amount repatriated abroad should not exceed USD one million per financial year.

The debit to the account should be only for the purpose of repatriation to the account holder’s account maintained abroad.

There should not be any other inflow / credit to this account other than that mentioned at point (a) above.

AD Category-I bank should put in place proper internal control mechanism to monitor the credits and debits to this account.

The account should be closed immediately after all the dues have been received and repatriated as per the declaration made by the account holder mentioned at paragraph (a) above.

5. Remittance of assets by NRI/PIO

5.1 A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit an amount up to USD one million, per financial year, out of the balances held in his Non- Resident (Ordinary) Rupee (NRO) account / sale proceeds of assets (inclusive of assets acquired by way of inheritance or settlement), for all bona fide purposes, subject to payment of applicable taxes in India, if any.

5.2 NRI/PIO may remit sale proceeds of immovable property purchased by him out of Rupee funds (or as a person resident in India) as indicated in paragraph 5.1 above without any lock-in-period.

5.3 In respect of remittance of sale proceeds of assets acquired by way of inheritance or legacy or settlement for which there is no lock-in period, NRI / PIO may submit to the Authorised Dealer documentary evidence in support of inheritance or legacy of assets, an undertaking by the remitter in the prescribed formats. Settlement is also a mode of inheritance from the parent, the only difference being that the property under the settlement passes to the beneficiary on the death of the owner/parent without any legal procedures/hassles and helps in avoiding delay and inconvenience in applying for probate, etc. If the property is received by NRI/PIO by way of settlement without the settler retaining life interest, it may be reckoned as transfer by way of gift and the remittance of sale proceeds of such property would be guided by the extant instructions on remittance of balance in the NRO account.

5.4 (a) A person or his successor who has acquired immovable property in accordance with Section 6(5) of FEMA, 1999 cannot repatriate sale proceeds of such property outside India except with prior permission of the Reserve Bank.

(b) The facility of remittance of sale proceeds of other financial assets is not available to citizens of Pakistan, Bangladesh, Nepal and Bhutan.

6. Remittance of Salary

6.1 A citizen of a foreign State, resident in India, being an employee of a foreign company or a citizen of India, employed by a foreign company outside India and in either case on deputation to the office/ branch/ subsidiary/ joint venture/ group company in India of such foreign company may open, hold and maintain a foreign currency account with a bank outside India and receive the whole salary payable to him for the services rendered to the office/ branch/ subsidiary/ joint venture/ group company in India of such foreign company, by credit to such account, provided that income tax chargeable under the Income-tax Act,1961 is paid on the entire salary as accrued in India.

6.2 A citizen of a foreign state resident in India being in employment with a company incorporated in India may open, hold and maintain a foreign currency account with a bank outside India and remit the whole salary received in India in Indian Rupees, to such account, for the services rendered to the Indian company, provided that income-tax chargeable under the Income-tax Act, 1961 is paid on the entire salary accrued in India.

[The term ‘company’ will include a ‘Limited Liability Partnership’ as defined under the LLP Act, 2008]

7.1 Repatriation of sale proceeds of residential property purchased by NRI / PIO is permitted to the extent of the amount paid for acquisition of immovable property in foreign exchange received through banking channels. The facility is restricted to not more than two such properties. The balance amount can be credited to the NRO account and can be remitted under USD one million facility as mentioned in paragraph 5.1.

7.2 Authorised Dealer banks may permit repatriation of amounts representing the refund of application / earnest money / purchase consideration made by the house building agencies / seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/ FCNR (B) account of the account holder, or remittance from outside India through normal banking channels and the Authorized Dealer bank is satisfied about the genuineness of the transaction. Such funds may also be credited to the NRE / FCNR (B) account of the NRI / PIO, if they so desire.

7.3 Authorised Dealer banks may allow repatriation of sale proceeds of residential accommodation purchased by NRIs/ PIO out of funds raised by them by way of loans from the authorized dealer banks / housing finance institutions to the extent of such loan/s repaid by them out of foreign inward remittances received through normal banking channel or by debit to their NRE / FCNR(B) accounts.

8.1 Students going abroad for studies are treated as Non- Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA.

8.2 As non-residents, they will be eligible to receive remittances from India up to (i) limits prescribed under the Liberalized Remittance Scheme which would include remittances from close relatives in India towards maintenance and remittances towards their studies. However, for the purpose of studies, the limits would be as demanded by the university abroad; and (ii) USD 1 million per financial year, out of sale proceeds of assets / balances in their NRO account maintained with an Authorised Dealer bank in India.

8.3 All other facilities available to NRIs under FEMA are equally applicable to the students.

8.4 Educational and other loans availed of by them as residents in India will continue to be available as per FEMA regulations.

9. Income-tax clearance

The remittances will be allowed to be made by the Authorized Dealer banks on production of an undertaking by the remitter in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India from time to time. Reserve Bank of India will not issue any instructions under FEMA, 1999 clarifying tax issues. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of tax laws, as applicable.

10. International Credit Cards

Authorised Dealer banks have been permitted to issue International Credit Cards to NRIs/ PIO, without prior approval of the Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder’s FCNR (B) / NRE/ NRO accounts.

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